The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday deferred a hearing in the Vedanta case to October 8. The government accused Vedanta of using the demerger scheme as a tactic to avoid clearing dues owed to it.
Vedanta shares ended 1.2 per cent lower at Rs 456.1 apiece on BSE after the news, halting five consecutive days of gains amounting to 6.6 per cent.
Earlier, the tribunal deferred the Vedanta demerger hearing to September 17 citing SEBI’s ongoing scrutiny and certain objections raised by the Centre.
NCLT Mumbai defers hearing in Vedanta case | What is the matter?
Vedanta plans to split the company’s several business verticals into separate entities to unlock value while enhancing operational focus.
The plan was initially rejected by the court over non-disclosure of certain debt on the pretext that it could impact valuation. The debt in question was worth about Rs 1,251 crore owed to SEPCO, an EPC contractor for TSPL. The National Company Law Appellate Tribunal (NCLAT) — a special court to hear appeals against NCLT’s orders — later set aside the NCLT rejection following a settlement between Vedanta and SEPCO.
The government has objected to the proposed demerger citing concerns over insufficient asset disclosure, potential liabilities and regulatory compliance.
The Centre has also flagged risks and asked for additional disclosures and guarantees, causing delays in proceedings.
Vedanta has asserted that nearly all creditors and stakeholders have approved the scheme. It has also responded to government objections raised at NCLT concerning financial disclosures and liabilities by providing additional disclosures and committing corporate guarantees to cover the Centre’s dues related to its oil and gas business.
Vedanta’s management has expressed optimism about completing the demerger within the current financial year.
Vedanta also undertook corrective actions after capital market regulator SEBI issued an administrative warning to the private sector mining major for modifying its demerger scheme following the receipt of no-objection certificates (NOCs) from stock exchanges without prior approval.
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